The European Parliament (EP) has given its final endorsement this Tuesday to the European Chip Law with which the European Union seeks to double its production of semiconductors to cover 20% of world manufacturing and thus reduce its dependence on Asia for some components key in technological development, reports EFE. MEPs also gave their support with 587 votes in favour, 10 against and 38 abstentions to the political agreement reached in April with the Member States on the law. In this way, the new legislation may enter into force when the countries also give the green light, foreseeably at the end of summer.
In the debate prior to the vote, the Romanian Social Democrat Dan Nica pointed out that “our goal is to strengthen the EU’s position in the global semiconductor landscape and attack the vulnerabilities in supply chains exposed by the pandemic.”
The law, organized into three pillars, plans to increase the capacity to manufacture chips in European territory, including cutting-edge ones, consolidate European leadership in semiconductor research and promote the transfer of these innovations to the market, as well as better monitoring of supply chains. supplies to anticipate and respond to crises. It will be endowed with 3,300 million euros from the European budget, but the European Commission calculates that it will make it possible to mobilize some 43,000 million euros of investment by attracting other publications, for example from the post-pandemic recovery fund, and private ones.
Reduce dependence on Taiwan and South Korea
The European Union (EU) hopes to reduce its dependence on Taiwan and South Korea, which have almost a world duopoly in the manufacture of chips – they produce 100% of the most advanced ones – and enter the global race to boost a sector at that China, the United States and Japan will allocate billion-dollar subsidies in the coming years. To increase the manufacture of chips, the European law provides for the identification of “first of its kind” factories due to their production processes or their level of innovation, which will benefit from additional public aid and accelerated administrative procedures.
These may include those that will produce chip-making equipment, a sector where the EU has leading companies. Also benefiting from additional public support are those chip design centers that receive a seal of “excellence.” On the other hand, in order to favor research in next-generation chips and the release of innovations to the market, the law provides for the creation of pilot lines in which they experiment with advanced semiconductors to which they have priority access to large factories, as well as how to support the development of quantum chips and make it easier for small businesses to obtain financing.
The European Commissioner for Industry, Thierry Breton, has pointed out that “there were times when Europe only invested in research and relocated production: that time is over now. We need massive investments in our industrial base.” In this regard, Breton said that “it is not only a matter of competitiveness, but of security and technological sovereignty.”
The regulation will also approve a coordination mechanism between the European Commission and the States to monitor supply chains in order to anticipate supply problems and take emergency measures in the event of a crisis. In this scenario, Brussels could require companies to provide information on the situation of their production, “first of its kind” factories would be obliged to give priority to orders that the EU considers relevant to respond to the crisis, and the European Commission could buy chips on behalf of Twenty-seven.
Sanctions of up to 300,000 euros
Companies that fail to comply would face sanctions of up to 300,000 euros for not providing information or periodic fines of up to 1.5% of their daily turnover for not respecting priority orders.